<p>Decomposition is one of several controls on carbon storage in seagrass meadows, but the relative importance of environmental conditions and seagrass species identity in driving decomposition is unclear. We first investigated direct environmental effects on decomposition by measuring percent mass lost of standardized litter, green and rooibos (red) tea, incubated in meadows spanning a naturally occurring phosphorus gradient for up to 2&#xa0;years; we then investigated indirect effects by measuring percent mass lost of seagrass leaf litter sourced from these meadows and incubated in a single location for up to 2&#xa0;months. We tested the effect of species identity on decomposition by incubating litter from two seagrass species, the larger-bodied <i>Thalassia testudinum</i> and the smaller-bodied <i>Halodule wrightii</i>. We found evidence for both direct and indirect environmental effects on decomposition: the green tea decay rate was lowest at the phosphorus-limited site (0.011 d⁻¹), and <i>T. testudinum</i> litter decay rate was lowest for leaves collected from the phosphorus-limited site (0.017 d⁻¹). Species identity had a stronger effect on leaf litter decomposition, where mean leaf litter decay rates were consistently greater for <i>T. testudinum</i> (<i>k</i> = 0.022 ± 0.002 SE) compared to <i>H. wrightii</i> (<i>k</i> = 0.010 ± 0.001 SE). This finding was unexpected because <i>T. testudinum</i> meadows are typically associated with higher sediment carbon stocks than meadows dominated by other species and suggests that <i>T. testudinum</i> may promote carbon storage by producing above- and belowground litter in quantities that accrue as sediment carbon despite fast initial leaf litter&#xa0;decay rates, or through other mechanisms, such as particle trapping by the seagrass canopy.</p>